Self-Driving Vehicles – Cascade Consequences & Product Opportunities

Things. And the Relationships Among Them

Many years ago I’d read a discussion about a few early science fiction writers. One thing that particularly struck me was thoughts about how it was one thing to imagine a few potential possibilities for technology or products, but quite another to brainstorm all of the side impacts of such things, both obvious and non-obvious. Those writers who thought of flying cars well before their time may have been prescient. But the ones who thought about how that might require new air traffic patterns, accident management, skyborne fast food pickup windows and more, they were even more visionary. They thought through what a lot of the cascade side effects might be; both for adjacent technologies and systems, and sociologically.

We understand these things a little better now. Such thoughts are as much – or more – the purview of technologists, inventors and investors as they are of futurists and science fiction writers. As we’ve moved from the popularity of hard goods to the popularity of virtual goods and now back to something in between, (the Internet of Things (IoT)), and more physical things, (3D printers, personal robotics, drones, self-driving / driverless cars and other vehicles), we’re coming up against the reality of these side effects.

So? Product Management?

From a Product Manager’s perspective, we can and should look at these technologies not just in terms of the obvious products themselves, but potential cascade consequences, support products, services, and the relationships among them. Our job is to not only to consider how to create value, but how our businesses can extract value. Consider for a moment industry standard Application Programming Interfaces (APIs). Often, such standards will be based on industry consortia working together. But sometimes that doesn’t happen as quickly as it could or should. (Such as in ecommerce.) The result is there’s clearly a value to doing it, but it’s hard to justify doing it as a business as it would be hard to extract value from the industry. In short, there’s a lot of great ideas out there that could be done, but the business case doesn’t necessarily quite justify doing them for super low margins. Another example is microformats. Microformats for various data types have been invented because industry couldn’t wait for standards to be developed. Now, we have Schema.org trying to get in front of these issues.

So for the new driverless car era which will produce the next trillion dollar industry, where do you want to play? Maybe you’re not anywhere near this business now. Then again, maybe you are. When all of a sudden you’ll have all the core and ancillary technologies of the cars themselves, plus the ability for people do other things in their vehicles besides drive, maybe products you’re working on right now do have a place in vehicles. Or maybe you want to work on something that does, given the likely size of this market.

Product adjacencies will be huge in this market. Think about the multi-billion dollar smartphone accessory industry. According to ABI, it was over $81 billion in 2015. What about future in car sleeping / napping couches? Food prep? Whole compartment replacements for specific missions? (Cargo, commute, long distance travel.) What about services to re-unite people with items they leave in cars? Will there be more traffic and pollution expended when it’s cheaper for an autonomous car to just keep driving around for a few hours instead of parking in an expensive lot?

What we Already Know

I’m approaching this topic from a Product Management perspective. There are pundits all over that have posited a variety of future aspects of this industry. So I’ll offer a brief survey – with references where I can – of many of what appear to be some obvious issues. But as I go through these, you should be thinking…

“What else?”

“What are the consequences of this?”

“What else is affected by this?” That is, when people are buying mobility and not actual vehicles as part of Transportation as a Service (TaaS).

“Who are other industry losers or potential winners here?”

“Where can I create value to this customer/individual/business/government?”

Consumer Driver Impact

This is perhaps the most obvious impact area. You’re no longer doing battle with your 10,000 of your closest commuter friends everyday. Your ride is now nap time or reading or work time, just like the folks on the train. Just perhaps less company. Maybe you replace the center console with a microwave for breakfast. Fold down bar in the back for the ride home? Why not? You’re not driving. You could even have a slide out porta-potty. (Oh come on, if you can go at 40,000 feet flying at 500 MPH you can go at 60 on the ground. Just watch out for turns and short stops.)

You might not own your own vehicle in this new world. Maybe you just have a guaranteed time share for commuting time with one of the several companies providing such services.

You can now select the vehicle you need for your purposes. If you don’t own, you just order what you need at the time. Even if you do own, if you need something larger to get that mattress home or the plywood from Home Depot, you just have that vehicle show up to give you a ride to the store that day. Or just meet you at the store if this was an impulse purchase.

If you do still insist on your own wheels…

Assuming more efficient driving, you should be paying less for gas, (whatever the going cost), less for insurance, and get there faster as traffic learns to cooperate with itself.

And your kids? No more worry about how they’re getting here or there. They can have their own accounts with a service of your choice that limits from where they can come and go. And report to you when they get on board or get to their destination.

One thing that you’ll have to be careful of is to make sure you maintain all your payments to everyone. And your permits. And don’t get any warrants for your arrest. Otherwise, your car may a) not work for lack of payment, or b) lock the doors and drive you to the police station.

At some point, you may pay a lot more for a manually driven vehicle. Leaving aside what will likely one day be a prohibitive cost for insurance if you want to drive yourself, if production shifts to autonomous vehicles, getting one with all manual controls may be expensive.

Commercial Driver Impact

Trucking

From the Drivers’ perspective, it’s time to find a new job. Or at least not enter the field. It’s likely that those that can will retire early. Those that are in prime earning years will be among the dis-intermeidated newly unemployed. Young folks will see the writing on the wall and not want to get into the business. Though some may still do so because a job’s a job and they’ll be few and far between. Who knows? As people choose not to enter the job market in a dying field, it may push up wages temporarily.

Car Service / Taxi / Busses

Screwed, Screwed, and likely screwed. In the case of busses, it’s possible unions will have enough power to require a supervisor to sit there and watch the bus. Maybe. Not quite sure how you justify wage increases that way for your years of experience. In any case, car services and taxis of course lose one of their highest costs; employees. Vehicles will be deployed based on need, they’ll take the best routes and they won’t play bad music or stink up your ride. On the other hand, we lose yet another slice of humanity from the world as there’ll be no talk of what’s going on locally, where’s good to go for the best… whatever. Yes, of course, the geo-fenced ads displayed for you based on your preferences will be there. But still.

So what might some of these people do? It would be a low end job, but the industry will likely still need someone to help clean up. It’s possible robots could come on board and just use high pressure hoses to clean plastic insides and dry them out, but chances are shared rides will need more cleaning given the sad reality that people often don’t treat shared resources very well.

Meanwhile, someone needs to invent the automated cleaning equipment. Maybe we’ll want sensors to check for cleanliness? Bacteria? Disease? Will there need to be cleaning sensors with cameras that inspect for trash?

Externalities

General

Insurance:

Will it go up or down? Some argue insurance will go up. Others say down. My personal belief? Both. It will go up initially until insurance companies get comfortable with what the actual risk is. As the autonomous vehicles prove out that they’re safer, rates will go down. However, they’ll go up for those still driving manually. It will be like a tax on drivers who won’t let go. Why? For starters, their accident rate will be higher. That’s a simple thing to figure out. But also, there will be a smaller risk pool as more and more fully autonomous vehicles are out there. So less payers for that class of insurance to spread around the risk.

Productivity Gains:

Medical / Emergency Services

Accident call volume should decrease drastically over time. While all personnel may enjoy less of such trauma, people in the field may have to train harder to make sure skills don’t atrophy due to less frequent hands on experience. It’s a horrible thing to think about, but the reality is firefighters, medics and emergency docs / nurses get better with actual experience. Another effect, (which may be thought of as generally good), will still impact some bottom lines. Hospitals, ambulance services, others will see significant revenue losses due to lack of business. Good for those who aren’t getting hurt, bad for those who earn their living from such unfortunate events.

What will happen to these services? Will they look for other opportunities? Our modern times have already provided better online training tools then ever existed. Will even more scenario based simulators be of even higher value to maintain professionals’ skills?

Bad Behavior

Alcoholics will just love this! No more DUIs. One less consequence to bad behavior.

Everyday Pranks. Can’t you see some kids loading one of these cars up with fireworks and just having it head down the road? (Using someone’s stolen rideshare account of course.)

Terrorism / Hacking…

If history is any guide, it’s likely that there will be a bunch of players here, but a concentration of a handful of manufacturers of the vehicles and their internal components. In a worst case scenario, there’s a bunch of manufacturers who get the brains of their vehicle from only two or three suppliers. Those suppliers, or whatever the vulnerability might be, will be a primary target of both state-sponsored and indie terrorists. Why? Because all of a sudden they have a means to utterly cripple the entire transportation infrastructure of an entire country. And there will likely be all kinds of security holes in these products because until some bad things happen resulting in large liability judgements, the responsible parties have very little incentive to expend serious effort here. Lip service and compliance to some basic laws? Sure. But take it seriously? Not really. Not until it costs big time.

And ah yes, of course… what could be more of a terrorist’s dream than loading up a vehicle or 20 with explosives and sending them on their way.

Environment / Climate

Global Warming, true of false? Doesn’t matter. Whether Global Climate change exists at all, and if it does whether the cause is do to human activities is only a side show for purposes of this discussion. If it’s real, the efficiencies of autonomous cars will of course be a positive factor. But more immediately, we should see drastic reductions in concentrated local pollution and air quality. As a result, associated medical conditions should decrease to some measurable degree. Vehicles will still pollute of course, but as traffic jams are better managed, there should be less concentration of pollutants, which is most often the core problem. That is, the environment can absorb and manage all kinds of things, but only to a certain point. Maybe we’ll push that point back a bit.

Maintenance / Repair Services

This will become more fleet oriented and also become more efficient. After all, from a consumer perspective, I don’t necessarily need time to take my vehicle to the shop. Unless it’s badly damaged, it can bring itself there. And that is assuming I even own a vehicle anymore vs. just call one of the services to have any random car show up and take me where I need to go.

Breakdowns? I shouldn’t have to call AAA or whomever to come fix my car and take me someplace to manage its repair. I just order a new vehicle to come pick me up. If the broken vehicle is owned by me, it will need towing, but I don’t have to wait for it. It can go someplace for repair and drive itself home when it’s done. Maybe I can even lease it back to a service so on it’s way home it can take passengers and earn some money for that repair bill.

Hotel / Motel / Why?

The calculus for deciding fly vs. drive will of course change. But there’s also a hotel issue here. For the cost of an overnight stay, why don’t I just sleep in a comfortable vehicle while enroute door-to-door? On a typical highway it shouldn’t be too bad a ride. I can now schedule such rides for overnight, save money on hotels and avoid the hassle of transportation from airports, etc. So what services might be needed here? Well, maybe I still want to freshen up at my destination. So instead of a $200 overnight, I maybe pay $20 for an hour in a nicely appointed bathroom. This already exists at some larger truck stops. All of a sudden, we may see more of these designed and priced for short haul business travelers.

All of a sudden, maybe I will take a one day ski trip. Or whatever. Because the cost just won’t be that much and the cost of my wasted time and effort drops to almost nothing.

New Product Possibilities

What can I put in vehicles for riders now? It’s probably beyond more cupholders.

Cooking tools?

Sleeping spaces?

Bathrooms?

New Service Possibilities

Maintenance services wholly at your convenience as the vehicle can drive itself to wherever.

In transit delivery? The tech should allow vehicles to ‘fly in formation’ safely. I’m not sure mid-drive re-fuel will show up right away, but it should be possible. But perhaps simpler efforts can come first. Open the moon roof and deploy your pizza catcher? There are some places where boating is popular where there’s hot dog stands on floating barges. Why not have all those lunch trucks just driving in the lunch / service lane. Your order wirelessly, then when it’s your turn, your vehicle intercepts the lunch truck for delivery.

Bottom Line

We all know this is coming. The only question is timeline on adoption rates. So what will the product and service adjacencies be? And when does it make sense to start investing in them? The history of the Web is littered with dead pool companies that had the right idea, but just too early. (Of course, there are also some newer companies that aren’t really all that new in terms of ideas and may in fact be infringing on older patents, but that’s another story.) To be sure, car companies and upstream technology vendors will own a lot of the core customer access points; just as “last mile to curb” cable and internet providers have a lot of power over online customers. Nevertheless, there’s a multi-billion dollar adjacent products marketplace coming within the next five to twenty years. The core questions will be: Is your business at risk? And where do you want to invest product efforts?

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